Detectives investigating what is alleged to be one of the biggest financial crime syndicates in Australian history believe the group has defrauded the country’s major banks of more than half a billion dollars.
Police fear banks face a “perfect storm” of losses from fraudulent loans and inflated mortgages as house values plummet across Sydney.
The Penthouse Syndicate is now believed to have fleeced Australia’s finance giants, including the National Australia Bank, Commonwealth Bank, Westpac and ANZ, of at least $500 million — double what investigators previously feared the banks had been exposed to.
Detective Superintendent Gordon Arbinja, commander of the financial crimes squad, said the total of the syndicate’s alleged frauds was expected to surge.
“We’re only scratching the surface,” he said. “I fear it’s at least double our estimates. That’s my fear.”
Financial crimes squad detectives working under Strike Force Myddleton on Wednesday arrested and charged three accountants accused of facilitating $15 million worth of fraudulent loans for the syndicate.
The focus of the two-and-a-half-year police investigation has shifted towards allegedly corrupt real estate agents and property developers whom police believe helped the group build a luxury property empire across Sydney.
Each of the properties purchased by the syndicate is believed to have been overvalued – in some cases by millions of dollars – through legal agreements hidden from the banks that allowed the group to secure inflated mortgages and use profits to service allegedly fraudulent home loans.
Under the deals – known as deeds of rebate – vendors reimbursed alleged syndicate members the difference between the property’s market value and its inflated sale price, leaving lenders scrambling to chase losses which Arbinja said would be worsened by the city’s weakened housing market.
Real estate agents and developers involved in the sale of properties to the syndicate who are now under police scrutiny should have been aware of homes’ market values, Arbinja said.
Arbinja urged banks to foreclose mortgages suspected of being fraudulent and serviced with tainted funds as detectives unravel the syndicate’s alleged frauds.
National Australia Bank, which the syndicate has allegedly defrauded of at least $150 million, has launched legal proceedings against a retired factory worker, Hanna Karliana, to repossess a Bellevue Hill townhouse allegedly bought using fraudulent financial documents.
Lawyers for the bank told the NSW Supreme Court that the property, which detectives believe was overvalued when it was purchased for $7.6 million in December 2024, was in negative equity. Karliana, 62, has not entered a plea to charges of participating in a criminal group and dishonestly obtaining financial benefit by deception.
The bank declined to comment on the legal action, citing the ongoing proceedings.
A year-long investigation by this masthead into the syndicate has previously uncovered allegations that the group defrauded NAB of more than $150 million in the past two years. Several former employees have been collectively charged with fraud offences exceeding $100 million and remain before the courts. Others have been sacked by the bank but have not been charged.
The syndicate’s alleged mastermind, Shanghai-born Bing “Michael” Li, was arrested in the penthouse apartment of the Crown’s residential tower at Barangaroo last July. Detectives allege Li, 39, directed the syndicate’s activities from the $37,000-per month apartment, which he rented for about a year before his arrest.
The raids at the Bankstown office of AGFA Accountants marked a significant milestone in the syndicate’s alleged infiltration of the banking and finance sector as detectives marched the firm’s director, Faheem Ahmed Syed, and two of his employees from the building.
Officers from the NSW Crime Commission, Australian Taxation Office, Australian Securities and Investments Commission and the Tax Practitioners Board swarmed the firm’s headquarters just after 11:30am on Wednesday.
Detectives were expected to charge Syed on Wednesday night with participating in a criminal group and more than 20 counts of creating and dealing with false documents related to the allegedly fraudulent loans. Two of his employees, Amer Mohammed and Puja Phayal, were expected to be charged with similar offences.
Detectives expect to arrest dozens more syndicate members. So far, they have arrested 33.
The NSW Crime Commission has seized almost $100 million worth of assets linked to the syndicate, including property, luxury cars, cash and jewellery.
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